SJDB Benefits

Defendant, seeks reconsideration of an Order Approving Compromise and Release in which a Worker’s Compensation Judge approved the Compromise and Release Agreement but added language stating that “parties may not settle or commute SJDB per LC §4658.7(g) and CCR §10133.31 (h). The order effectively disallowed the parties’ agreement to settle any claim applicant may have to a Supplemental Job Displacement Benefit Voucher pursuant to Labor Code §4658.7.

Defendant contends that they are permitted to settle the Supplemental Job Displacement Benefit voucher were a good faith dispute exists could potentially defeat applicant’s entitlement to all worker’s compensation benefits.

The WCAB held that where the parties establish there is a good faith dispute which, if resolved against the applicant, would defeat his entitlement to all workers’ compensation benefits, applicant may settle his claim by a Compromise and Release Agreement that also settles his potential right to the Supplemental Job Displacement Voucher.

The WCAB found that in this case the parties establish that a good faith dispute exists.

Labor Code §4658.7(g) provides that settlement or commutation of a claim for the supplemental job displacement benefit shall not be permitted.

Defendant argues that where there is a good faith dispute of compensability of a claim of injury, the party should be permitted to settle applicant’s entitlement to the Supplemental Job Displacement Benefit voucher, analogizing to the situation which existed with respect to the settlement of vocational rehabilitation benefits pursuant to the case of Thomas v. Sports Chalet (42 CCC 625). Labor Code §5100.6 provided that the Appeals Board shall not permit the commutation or settlement of compensation indemnity payments or other benefits to which the employee is entitled under rehabilitation.

In Thomas the WCAB concluded that the statutory prohibition against the settlement of vocational rehabilitation benefits did not preclude the approval of a Compromise and Release Agreement that provided for a complete release of vocational rehabilitation benefits, the Appeals Board relying upon the policy favoring settlement of disputed cases.

The WCAB concluded that the prohibition against settlement of the Supplemental Job Displacement Benefit voucher is analogous to the prohibition against settlement of vocational rehabilitation benefits, which Thomas held could be resolved in a Compromise and Release Agreement only where a serious and good faith issue exists, which if resolved against the applicant would defeat all right to compensation.

An injured worker’s entitlement to the Supplemental Job Displacement Benefit voucher is conditioned upon both the acceptance of liability for a claimed industrial injury by the employer and the existence of permanent partial disability, or a determination of these issues after trial. Where an employer denies liability and raises an affirmative defense that could potentially defeat all right compensation, a prohibition or settlement of the Supplemental Job Displacement Benefit voucher would require a trial to determine injury and the existence of permanent partial disability in every case. The Board in Thomas recognize that that would result in (effectively doing away with settlements) despite the existence of good faith disputes that could totally bar recovery.

The WCAB held, that has in Thomas, where the trier fact makes an express finding based upon the record that there is a serious and good faith issue that exists to justify a release, a compromise and release agreement may be approved by the Board which will relieve the employer from liability for the Supplemental Job Displacement voucher.

The parties in the Compromise and Release in this case set forth the basis for an express finding that is serious and good faith issue exists that would justify the release of the Supplemental Job Displacement Benefit voucher. Defendant cited its affirmative defense under Labor Code §3600 (a) (10), that applicant did not give notice of his injury, and did not file his claim, until after his employment was terminated for cause, while applicant contended that he did give notice prior to his termination. This affirmative defense, if so found by a trier of fact, would far applicant’s recovery for all workers’ compensation benefits.

The Board concluded that a review of the record demonstrated the existence of a good faith dispute over applicant’s entitlement to Supplemental Job Benefit voucher, such that the party settlement of that benefit should be approved.